M & Z Legal – Advocates & Solicitors
The practical issue
Homebuyers may spend substantial sums defending title suits, obtaining records or responding to disputes created by a promoter’s conduct. The question is whether those expenses are recoverable as statutory compensation, rather than merely as procedural costs.
Statutory basis
Sections 18 and 19 provide certain compensation rights, while Sections 71 and 72 govern adjudication and the factors to be considered. Section 72 expressly requires consideration of matters including disproportionate gain, loss caused by default and the repetitive nature of default. Compensation is not automatically synonymous with every rupee a purchaser has spent.
Causation and reasonable expenditure
An allottee seeking litigation expenses should show the promoter’s actionable breach, why the expenditure was reasonably necessary, and how it resulted from that breach. A third party’s baseless suit, without proof of defective title or other promoter default, may not itself establish liability. Invoices, fee receipts, pleadings, orders and evidence of attempts to mitigate loss are relevant.
Compensation versus costs
The expense of defending separate title litigation may be argued as consequential loss where legally recoverable. Costs of the RERA proceeding itself raise a different question governed by the forum’s powers and procedural rules. Neither category should be claimed twice under different labels.
Quantification
An adjudicator may distinguish necessary expenditure from excessive, speculative or unrelated fees. The claim should identify each expense, date, payee, purpose and causal link. If future legal expenditure is uncertain, it may be premature to quantify it as an accrued loss.
Conclusion
Litigation expenses can present a serious compensation question, particularly where defective title forces a purchaser to defend ownership. Recovery is not automatic: the decisive questions are statutory entitlement, proof of breach, causation, reasonableness and avoidance of double recovery.
